Coal industry: 2017 in review Report

Insight 23 January 2018

Get this report*

$1,100

You can pay by card or invoice

Share link

First name
Last name
Job Title
Company
Email
Telephone

Country

Message

Consent

Please keep me informed about Wood Mackenzie products, services and events.

Submit Category

For details on how your data is used and stored, see our Privacy Notice.

- FAQs about online orders
- Find out more about subscriptions

*Please note that this report only includes an Excel data file if this is indicated in "What's included" below

Report summary

China and the weather played important roles in the 2017 coal industry. Cyclone Debbie's impact lasted far longer than the bad weather. And, once again, policy action in China agitated markets, lifted prices, intensified volatility, and produced a large measure of uncertainty. Suppliers eyed high prices longingly, but the hard lessons of the recent past made them cautious about exuberant expansion. Still, prices helped them repair balance sheets. India continues to chip away at power industry reform adding incrementally to coal's possibilities. In the US, natural gas and coal remain locked in a price battle that has no end. After years of decline, encouraged by falling prices, coal costs turned upward in 2017. Even so, margins rose and M&A activity rebounded somewhat. But, there was also growing proof that financing new coal projects is becoming more difficult.

Key factors
Coal prices were strong – and volatile
- Chinese policy drove thermal coal prices higher with a boost from a warm summer
- A year-long metallurgical coal price yo-yo
- Policy and regulation take center stage
  - Environmental protection was a primary goal
  - Induction furnaces were closed
  - Stiffer import coal restrictions were enacted
  - Data proves the power sector grew but is growth sustainable?
  - A year of two halves
  - Increasing focus on air pollution and environmental standards
In the US, new policies will lower the regulatory burden for companies; will it matter?
- The Clean Power Plan is on the way out
- The Grid Resiliency Pricing Rule is rejected
Cyclone Debbie roiled markets for months
Natural gas often outcompeted coal in the US
Coal benefited from nuclear industry issues
Financing is becoming more difficult